NPS delivers -0.57% returns as of late Oct, the first negative in a decade

South Korea’s National Pension Service (NPS), the world’s third largest pension fund, is expected to deliver the lowest return rate of some minus percent in a decade this year due to the local stock market that tumbled the biggest in Asia throughout the year.

The country’s biggest institutional player disclosed Friday that it generated an average return of minus 0.57 percent on its assets as of the end of October, raising concerns that it would record the negative yield on its investment for full 2018 for the first time in 10 years.

The biggest driver that dragged down the return rate was bearishness of domestic and overseas stocks hit hard by multiple whammies like U.S.-China war-like trade tensions, monetary tightening and rising credit risks of emerging economies.

Of 637 trillion won ($570 billion) assets under management as of the end of October, the NPS has placed 109 trillion won in local stocks and 119 trillion won in overseas stocks. Korean stocks delivered the lowest return rate of minus 16.57 percent, overseas stocks a mere 1.64 percent, domestic bonds 3.86 percent, and foreign debt 4.66 percent, and alternative assets 7.57 percent.

The main Kospi plummeted about 14 percent in October alone as foreign investors dumped a net 4.5 trillion won shares. The tech-heavy Kosdaq also slid nearly 20 percent, wiping out about 261.4 trillion won in market cap.